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Network Planning Methods. PERT/CPM. Benefits. forces managers to ... network diagram) the order of activities, demonstrating predecessors. Network Planning ...
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Project Management • What is a project? • An interrelated set of activities that has a definitive beginning and end that results in a unique product or service
Project Management • Elements of project management • Project manager • has the responsibility to integrate the efforts of people from various functional areas to achieve specific project goals • Project team • a group of people that often represents different functional areas or organizations • Project management system • consists of an organizational structure (functional or matrix) and an information system (network planning system)
Project Management • When to use project management 1) The magnitude of the effort requires substantially more resources than are available in a particular functional area 2) The need for coordination among functional areas or other organizations is overwhelming 3) There is unfamiliarity with respect to certain tasks in the project and employees with appropriate expertise need to be brought together to carry out the project 4) The environment is rapidly changing and the firm needs to be flexible to adapt to changing needs 5) Functional areas working independently focus on their own situations rather than the organization’s goals 6) Project success is crucial to the organization
Network Planning Methods • PERT/CPM • Benefits • forces managers to organize data and express critical relationships • managers can estimate the completion time of a project • reports highlight the activities that are crucial to the completion of the project on time • managers can analyze the time/cost implications of resource trade-offs
Network Planning Methods • PERT/CPM • Describing the project • shows all activities required to complete the project • describes (through a network diagram) the order of activities, demonstrating predecessors
Network Planning Methods • PERT/CPM • Describing the network • consists of nodes (circles) and arcs (arrows) • Activity-on-arc (AOA) • arcs are activities and nodes are events • Events are any point at which one or more activities are to be completed and one or more other activities are to begin • an event consumes neither time nor resources • AOA is event oriented
Network Planning Methods • PERT/CPM • Describing the network • consists of nodes (circles) and arcs (arrows) • Activity-on-node (AON) • nodes are activities and arcs depict precedence relationships • AON is activity oriented
Network Planning Methods • Estimating time of completion in a network plan • probabilistic (uncertain) • deterministic (certain) • critical path • sequence of activities between a project’s start and finish that takes the longest
Network Planning Methods • Estimating time of completion in a network plan • Earliest start and finish times • Earliest Finish time (EF) • Earliest Start time (ES) EF = ES+t where t = the time required to complete the activity ES = EF from the preceding activity
Network Planning Methods • Estimating time of completion in a network plan • Latest start and finish times • Latest Start time (LS) • Latest Finish time (LF) LS = LF - t where t = the time required to complete the activity LF = LS from the immediately following activity
Network Planning Methods • Estimating time of completion in a network plan • Activity Slack • maximum time an activity can be delayed without delaying the entire project • there is zero slack in the sequence of activities in the critical path
Uncertain Time Estimates • Probabilistic Time Estimates • Optimistic time • shortest time an activity can be completed • Most likely time • best estimate of average time for an activity • Pessimistic time • longest time an activity can take
Uncertain Time Estimates • Probabilistic Time Estimates • Activity’s mean time (te) and variance (2) with beta distribution te = a + 4m + b 6 2 2 = (b-a/6) • Analyzing probabilities • Z values = due date of project - earliest expected date square root of the variances • determines probability that a project will be done by a specified date